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Report: JOBZ program working

Crookston Daily Times
Written By: Joshua Freed, Associated Press Writer

August 19, 2004 - Minneapolis (AP) - The JOBZ program that grants tax breaks to some businesses outside the Twin Cities appears to be working as lawmakers intended, a report issued Wednesday says.

The same report expressed concern that 17 percent of the businesses in the program were local relocations - raising the possibility that they moved across town mostly for a tax break.

The Center for Rural Policy and Development presented the report Wednesday at a conference in Hibbing designed to take the pulse of business and government leaders now that JOBZ is six months old.

The program allows local governments to create zones where certain businesses can operated for several years without paying some taxes, including the state income tax for businesses and property tax on improvements. It was an early economic development priority of Gov. Tim Pawlenty.

Critics have said JOBZ will create incentives to move existing jobs around while creating few new ones.

Among the findings:

• 22 percent of JOBZ businesses were startup companies;
• 19 percent were non-local relocations or expansions;
• 42 percent were local expansions, and another 17 percent were local relocations.

"This trend, if it continues may be problematic, especially the local relocations," the report said.